Technology | Media | Telecommunications

Wednesday, September 29, 2010

With Internet Protocol (IP) connectivity becoming a standard feature in most consumer electronics (CE) devices with a screen, the television and associated media industries -- in particular, the incumbent pay-TV service providers -- are attempting to fully understand the disruptive impact on their core business.

Hybrid set-top boxes (STB), that utilize both broadcast and broadband connectivity, could be vital tools that enable network broadcasters and pay-TV service operators to compete with low-cost high-value over-the-top (OTT) video offerings, such as Netflix and LOVEFiLM, according to the latest market study by In-Stat.

"When Apple began supporting applications on their Apple iPhone, a whole new industry was created with about half a million apps now available worldwide," says Gerry Kaufhold, Principal Analyst.

Now, with a multitude of connected TV devices moving into the market, Internet Video is becoming the new must-have service. TV programs may eventually become apps themselves to provide a direct-to-consumer engagement with titles, brands and ultimately with advertisers.

However, a more likely scenario, hybrid STBs could also be used to totally by-pass the incumbent pay-TV distributors, as some major content producers discover that they could use their established brand awareness to go directly to consumers with OTT video offerings -- at potentially much higher profit margins.

In-Stat's market research findings include:

- Western Europe will be the world's hotbed for development of hybrid applications and services with over 70 companies joining the Hybrid Broadcast Broadband initiative.

- Digital Terrestrial Hybrid STBs will more than quadruple in volume from 2010 to 2014.

- Over 2.7 million Hybrid STBs will be in use in Eastern Europe by 2014.